Co-op chief asks for 60% pay cut

Co-operative Group chief executive Richard Pennycook has asked board members to drastically cut his pay package as it is “the right thing to do”.

Pennycook took over the Co-op at its lowest ebb in 2014, branding £2.5bn losses a “disaster”.

According to Sky News he has asked for his basic salary to be cut by over a third, from £1.25m.

In addition, he wants his total compensation – which including bonuses and pensions – to be slashed.

Results published this morning show 2015 profits were down £23m from the previous year when the figure was boosted by a one-off £121m gain.

As a result Pennycook’s base salary will fall to £750,000.

In 2014 he received a total of £2.5m. However, his pay was due to rise to £3m because of a larger annual bonus.

Pennycook took over from Euan Sutherland, who quit following revelations of his pay package.

The Co-op’s woes began in 2013 as its banking division made huge losses and its chairman Reverend Paul Flowers was embroiled in a drugs scandal.

The group turned 2013’s £2.3bn loss into a £216m profit the following year.

However, in results published last week it was revealed the banking business made a pre-tax loss of £610m in 2015. This was driven by legal charges of £193m resulting from missold payment protection insurance.

At the start of this year the PRA fined and banned for life former Co-op bank chief executive Barry Tootell and managing director Keith Alderson.